China on Wednesday slashed its forecast for 2018/19 soybean imports as farmer reduce their use of the bean in animal feed because of the Sino-U.S. trade conflict, leading the government to raise its supply deficit estimate. According to Reuters, imports of
soybeans in the crop year that starts on Oct. 1 will be 83.65 million tonnes, down 10.2 million tonnes from last month's estimate of 93.85 million tonnes, the Ministry of Agriculture and Rural Affairs said in its monthly crop report.

The forecast is lower than the 93.9 million tonnes imported during the 2017/18 crop year.

The ministry said the lower forecast for soybean imports was due to the promotion of lower-protein feed for livestock and poultry. Additionally, falling profits at pig farms should reduce demand for soymeal feed for the herds.

The government also raised its estimate for corn demand due to rising feed consumption and increasing ethanol production and as soybean imports fall.

While the size of the soybean import cuts are largely inline with broader industry forecasts, the report marks the first official assessment by the government on the impact of the trade war, Reuters reports.

The outlook illustrates how China's vast pig farming sector is rapidly adjusting to a possible prolonged trade dispute with Washington. In July, Beijing levied an additional 25 percent tariff on U.S. soybeans, threatening supplies from the second-largest exporter of
the oilseed to China.

The import outlook changes pushed the 2018/19 soybean deficit forecast to 3.57 million tonnes from 250,000 tonnes in August, according to the report.

The ministry also raised its 2018/19 domestic soybean output forecast to 15.83 million tonnes from 15.37 million tonnes in August.